An entrepreneur was convicted of defrauding JPMorgan Chase into purchasing her college financial aid startup, Frank, for $175 million in July 2021.
Javice and her co-defendant, Olivier Amar, Frank's chief growth officer, were found guilty on all four charges: securities fraud, wire fraud, bank fraud, and conspiracy. The verdict came after a five-week trial in Manhattan federal court.
Javice showed no emotion as the verdict was announced. The judge scheduled Amar's sentencing for July 23 and Javice's for August 26, with both facing the possibility of decades in prison. However, the judge has broad discretion in determining their sentences.
Acting Manhattan U.S. Attorney Matthew Podolsky, whose office brought the charges, stated that while Javice and Amar may have believed they could deceive their way to a significant payday, their lies ultimately caught up with them.
Following the verdict, Amar's lawyer, Sean Buckley, expressed that Amar intends to continue fighting the charges. Lawyers for Javice declined to comment to reporters.
Javice studied at the University of Pennsylvania's Wharton School and founded Frank in 2017. She was featured in Forbes magazine's "30 Under 30" list in 2019 for her efforts to simplify college financial aid for students and parents.
However, JPMorgan sued her in December 2022, alleging that she misrepresented Frank's customer base. Criminal charges followed four months later. Prosecutors accused Javice of falsely stating that Frank had 4.25 million customers when it actually had only 300,000.
JPMorgan uncovered the inflated figure when attempting to contact customers for product sales and received far fewer responses than anticipated. The bank's chief executive, Jamie Dimon, has referred to the acquisition of Frank as a "huge mistake."
A bank spokesperson declined to comment on the verdict. In her opening statement, prosecutor Rushmi Bhaskaran claimed that Amar purchased "sham lists" of student data from third parties that they presented as actual customers to JPMorgan.
Javice's lawyer, Jose Baez, argued that JPMorgan conducted thorough due diligence and was aware of Frank's true client numbers prior to the purchase, suggesting that the bank's claims of being misled were motivated by "buyer's remorse."
Baez contended that JPMorgan only alleged fraud when it sought to exit its contract with Frank due to changes in financial aid regulations, which constituted the only basis for the bank to back out.
Neither Javice nor Amar testified during the trial. The judge will decide on April 1 whether Javice requires full-time location monitoring. Her lawyer, Ronald Sullivan, mentioned that her current income stems from teaching Pilates, which she cannot do while wearing an ankle monitor.